The arrest follows an indictment from December 10 by a federal grand jury in Los Angeles that charges Sanchez with pirating and releasing the blockbuster movie starring Hugh Jackman.

Sanchhez is expected to make his appearance in a New York court Wednesday; the crime carries a statutory three year jail sentence and a $250,000 fine or twice the gross gain or gross loss attributable to the offense, whichever is greater.

The case is a result of an investigation by the FBI in Los Angeles who were assisted by their field office in New York in arresting Sanchez.

The incomplete copy of X-Men Origins: Wolverine was leaked onto the Internet a month before the movie’s scheduled release.

Twentieth Century Fox studio immediately contacted legal authorities and the movie was taken down. The studio was a co-producer of the film with Marvel Entertainment, publisher of the X-Men comic series.

X- Men Origins: Wolverine – which cost $150 million dollars to make – grossed $180 million in America and $193 million overseas.

The theft highlights the difficulty Hollywood studios face as online distribution of movies and shows becomes easier. Piracy cost the film industry, including studios, theaters and video stores, $18.2 billion in 2005, according to the Motion Picture Association of America.